Which of the Following Accounting Principles Requires That Warranty Expense

question 102

Multiple Choice

Which of the following accounting principles requires that warranty expense must be estimated and recognized in the same period when the related sales revenue is recognized?

• A) the matching principle
• B) the disclosure principle
• C) the revenue principle
• D) the consistency principle

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Definitions:

Direct Approach

A method of financial reporting or problem solving that involves straightforward, clear communication without indirectness.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments not included in cash equivalents.

Financing Activities

Activities that result in changes in the size and composition of the equity capital and borrowings of a company.